From green hype to reality: The demand challenge
J. WATKINS, Hydrocarbon Processing, Paris, France
Speakers from law, engineering and technology converged at the Petrochemical & Refining Conference (PRC) Europe 2026 to debate the pace, economics and politics of the energy transition. The session, titled “From Green Hype to Reality: The Demand Challenge” and held on the conference’s opening day, was moderated by Marcel Hergert, Senior Business Analyst, Global Business Steering Chemical Catalysts at BASF. Three presenters brought sharply different vantage points to the stage but reached a shared conclusion: the transition is real, but it’s getting more selective.
U.S. policy: Politics and investment are not the same thing. Scott Segal, Partner at Bracewell LLP in Washington, D.C., opened with a caution against reading U.S. political signals as a proxy for investment direction. While the Trump administration has moved aggressively to roll back climate regulations, including withdrawing from the Paris Agreement, unwinding Inflation Reduction Act incentives and accelerating fossil fuel permitting, Segal argued that American clean energy investment has not collapsed.
“The underlying economics of renewables, for both power production and as a motor fuel, are largely policy independent,” Segal said. He cited flat power sector demand for 21 years now reversing sharply, driven by the growth of data centers, as evidence that market fundamentals are shaping investment as much as executive orders.
On the Strait of Hormuz crisis, Segal said Washington is drawing the wrong lesson. “The lesson is not drill baby, drill. The lesson is to bring together as many energy sources as possible.” He also flagged the November U.S. congressional elections as a factor that will concentrate political attention on fuel affordability, and predicted the House of Representatives is likely to change hands, bringing increased oversight of the energy sector.
FID: what gets built and what doesn’t. Hans van der Valk, Senior Principal Process Engineer at McDermott, framed the transition challenge around a single question: which projects actually reach a final investment decision?
“Green growth materializes where technology, capital and risk control come together,” he said. “Transition blues emerges where ambitions consistently outrun system capacity.”
Van der Valk pointed to brownfield conversion as the model most likely to succeed, using ENI’s conversion of underperforming Italian refineries to biorefineries as a prime example. Those projects worked, he said, because they maximized existing infrastructure, qualified for European Investment Bank financing and retained political support by preserving local jobs. By contrast, Shell’s abandoned SAF project in the Netherlands, which stalled while competitor Neste’s large-scale equivalent proceeded, illustrated how company structure, balance sheet strength and alignment with core business all factor into whether a project crosses the FID threshold.
On technology readiness, van der Valk pushed back on concerns about unproven tech. “The technology is there,” he said. “The problems are integration problems. Carbon capture is a good example. You can capture the carbon, but then you need somewhere to send it.”
Waste as feedstock: A new supply chain logic. Andrea Angeletti, Circular Solutions Commercial Vice President at Nextchem and Business Development Head at MYRECHEMICAL S.r.l., said Europe has experienced four energy crises in three years and can no longer afford to depend on supply chains that pass through geopolitical choke points.
“The energy transition must be sustainable not only from an environmental point of view, but also from an economic and social perspective,” Angeletti said. He pointed to a growing trend of oil and gas companies acquiring or partnering with waste management firms to integrate waste as an upstream feedstock, calling it an emerging but underreported development in European refining strategy.
Angeletti also flagged the pace of regulatory change as a project killer in its own right. “We need seven years to develop a project and in the meantime the Renewable Energy Directive in Europe has changed twice. Regulation needs to be more pragmatic, more flexible and more technology-agnostic.”
The Hormuz effect on biofuel economics. An audience question on whether higher gas prices resulting from the Hormuz crisis might accelerate FID on large-scale projects drew nuanced responses. Van der Valk noted that while the dynamics had shifted, Europe isn’t facing a true supply shortage, but rather a geographic dislocation of supply that adds transportation cost and creates a price ceiling on what SAF and biofuels can fetch in the market.
He also raised a less-discussed consequence of a larger SAF scale-up: SAF and eSAF require roughly 25% more primary energy per unit than conventional kerosene, meaning that IEA primary energy projections, which assume declining demand through 2050, may need revision if biofuels take on a significantly larger share of the energy mix.
Regulatory divergence: the new normal. The panel closed on a question of whether transatlantic regulatory alignment might return. Segal acknowledged that full harmonization was unlikely, but expressed cautious optimism that American politics, which he described as inherently cyclical, would eventually return to a more centrist energy policy posture.
“I believe we’re going to see a return to more familiar vocabulary in our energy policy,” he said. “I don’t believe we’ll ever see complete harmonization, but there will be a return to a more centrist viewpoint. That’s what I’m telling my clients.”
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